- Domestic aluminium prices rise on limited market availability
- MCX and LME aluminium prices correct w-o-w after recent gains
Domestic aluminium prices in India increased w-o-w despite a correction in both LME and MCX aluminium prices. Producer price increases and continued support from relatively tight global supply helped domestic prices remain firm. However, subdued downstream demand continued to limit buying activity.
According to BigMint’s assessment, P1020 aluminium ingot prices in Delhi NCR increased by INR 6,000/t (1.7%) w-o-w to INR 357,000/t on 11 September, from INR 351,000/t on 4 September.
How did Indian and global exchanges perform?
Domestic aluminium futures on the MCX declined by INR 1,550/t (0.4%) w-o-w to INR 348,800/t from INR 350,350/t a week earlier, offering limited support to physical prices.
Meanwhile, three-month aluminium prices on the LME fell by $18.5/t (0.6%) w-o-w to $3,294/t from $3,312/t. Despite the weekly decline, LME aluminium remained around $3,300/t and was still higher than the $3,242/t level recorded on 1 September.
LME aluminium inventories stood at 244,525 t on 8 September, down from 246,725 t on 1 September. The decline of 2,200 t, or around 0.9%, continued to indicate relatively tight exchange availability.
Market updates
The domestic aluminium market remained relatively subdued during the week, with no major events disturbing the value chain and buyers largely restricting purchases to immediate requirements. The ongoing monsoon season and softer downstream demand continued to limit inventory building.
At the same time, domestic producers continued to raise aluminium prices. NALCO increased its IE10 aluminium ingot price by INR 6,300/t, or 1.7%, to INR 371,500/t effective 11 September. BALCO and Hindalco also raised their aluminium prices during September, reflecting firmer global benchmarks and higher producer realisations. Despite the price raise, Domestic aluminium premiums remained stable at around $290/t
Outlook
Domestic aluminium prices are expected to remain range-bound to firm in the near term. Producer price increases, low LME inventories and continued global supply concerns could provide support.
However, subdued domestic demand, limited inventory building and the recent correction in LME prices may restrict further gains. China’s high aluminium production could also cap the upside unless global physical supply remains tight.
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